South Korea enforces naphtha export ban amid Middle East supply disruptions

South Korea began enforcing a ban on naphtha exports from midnight on Thursday as it moved to shore up domestic supplies amid disruptions caused by the conflict in the Middle East, the industry ministry said.

The move requires refiners to divert export volumes to the local market and give the government powers to order production and allocation of naphtha, a key petrochemical feedstock used in chips, autos, plastics and everyday goods.

South Korea relies on imports for about 45% of its naphtha demand, with 77% sourced from the Middle East, making supplies particularly vulnerable to the regional conflict, the ministry said.

Data from the ministry and Korea National Oil Corporation show South Korea exports about 11% of its domestically produced naphtha, volumes that authorities said will now be redirected to domestic users to stabilise supply.

The ban will remain in place for five months, with priority supply ensured for healthcare, core industries and essential consumer goods, the ministry added. 

Reuters